03 chandel small_ruminant_milk_india
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03 chandel small_ruminant_milk_india 03 chandel small_ruminant_milk_india Presentation Transcript

  • B.S.Chandel and Rishikanta Singh National Dairy Research Institute, Karnal (Haryana)-132 001 India
  •  Introduction  Smallholder milk production system and value chain  Dairy Value chain analysis  Critical issues in the value chain  Conclusions & Policy interventions
  •  Smallholder milk producers dominate production in developing countries the milk  In India, small and marginal farmers contribute (68 per cent)  Milk production by these households address vital issues of their livelihood, nutrition and employment  The paper looks at mainstreaming of small milk producers • Addressing the issue of livelihood & poverty • Augmenting the milk production at competitiveness View slide
  •  Typical integrated production • Crop residues-surplus family labor- household activities • Convert waste into high value products • Comparative advantage to produce at lesser cost  Marketed surplus • Individual household (50%) • Aggregated (70%)  Marketed mainly through • Milk vendors (58%) unorganized sector View slide
  • Figure 1: Dairy Value Chains of Small Milk Producers Consumer (5%) Retailer/ Retail outlets Retailer Wholesaler Private Processing Plants Cooperative union/federation Milk Vendor (58%) DCS (9%) Creameries/ sweet shops (20%) SMPMUs (5%) Contractual /contractor (3%) Small milk Producer Figures in parenthesis indicates percentage of the total marketed surplus DCS: Dairy cooperative Societies; SMPMUs: Small Milk Product Manufacturing Units
  •  The analysis helps policy maker to • Identify exogenous variables to stimulate the desired changes, • Determine competitiveness and power exercised by different players and • Understand the complexity of inter-linkages in the value chain.  Approach • Institute of Development Studies at University of Sussex, Kaplinsky and Morris (2001), Schmitz (2005)
  •  Dairy value chain was analyzed for its • Structure, competitiveness, integration, actors, governance and policy questions  Simple tabular analysis and total factor productivity were used to supplement the argument in the results
  • Average milch Average Cost of Cost of milk Total Factor animals/househ Productivity maintenance production Productivity old or farm (L/animal/da (Rs/animal/d (Rs/L) (TFP) (No.) y) ay) Karnal, Haryana: Subsistence farming (for milch buffalo) 2.27 6.800 186.86 27.07 0.0364 4.90 6.460 178.31 27.16 0.0362 8.29 5.73 168.85 28.77 0.0339 Jabalpur, Madhya Pradesh: for commercial dairy farms (90% buffaloes) 70 6.025 207.20 34.39 0.0266 238 6.200 204.04 32.91 0.0282 598 5.700 178.75 31.36 0.0288 Sources: Compiled from Singh (2013) and Sharma (2013).
  •  Animal Health Service Providers • Public animal health department, cooperative unions and private veterinarians.  Service Delivery System (Ahuja 1999) • Cooperative and private services- 80% at doorstep • Government units was less than 20 per cent  Smallholder milk producers’ dependence-High  Expansion of veterinary health facilities required35-60%. • From 7000 milch animals to 1000-1500 milch animals per veterinary institute
  • Herd size Average categories milch animals/ household (No.) Small 2.27 (100.00) Medium Large Average crossbred milch animal/ household (No.) 0.84 (37.00) Proportion of Proportion of households crossbred (%) milch animls (%) 49.00 23.70 4.90 (100.00) 2.14 (43.67) 37.00 45.66 8.29 (100.00) 3.79 (45.72) 14.00 30.63 Source: Compiled from Singh (2013)
  • Particulars Average milk production/household/day Milk Marketed surplus/household/day Proportion of milk marketed Cooperatives through different channels (%) Direct to consumers Open market (inclusive of milk vendors) Plains 8.4 Hills 4.5 Pooled 6.3 4.8 1.5 3.1 22.8 55.3 33.0 16.4 60.7 10.6 34.1 14.9 53.7 Average price (Rs/L) received Cooperatives 14.5 from different market channels Direct to consumers 17.2 Open market (inclusive 17.6 of milk vendors) 14.5 14.5 14.9 16.4 16.5 17.0 Source: Adopted from Bardhan et al., 2012
  •  Marketing Channels Marketing through Organized sector (12%) Marketing through Unorganized sector (88%)  Short term advantages of the unorganized sector The flexible payment schedule, even advance payment also possible Flat rate of milk which favours the farmers producing low fat milk like cow milk Higher milk price  Retardy growth of cooperative institutions  Lack of institutional framework for mainstreaming in private sector
  • Dairy Coop. Societies (No.) 250 160000 140000 Per Cooperative Society 200 120000 150 100000 80000 100 60000 40000 Producer Members (No.) Milk Procurement (KgPD) 50 Liquid Milk Marketing (LPD) 20000 0 0 1980-81 1990-91 2000-01 2008-09 2009-10* 1980-81 1990-91 2000-01 2008-09 2009-10*
  •  More political representation in management  Large cooperative societies- increased operational cost  Lack of representation of milk producers in federation/union  Out of the market price fixation and government interference  Lack of diversification in product-mix
  •  High transactions costs  Fresh milk marketing  Clean milk production  Demand specific milk production  Direct communication producer and consumer between the
  •  Improve veterinary services especially public and up-gradate local breeds to strengthen milk production capacity of smallholders  Strengthen institutional framework to bring small holder under the ambit of organized marketing,  Modernization of informal sector to reduce transactions cost and handling losses of milk,  Encourage fresh milk marketing and clean milk production for quality and demand specific production.